"Today the Panel approaches the end of its work and we are beginning to formulate our findings and recommendations which we will report to the full committee. This marks the Panel's 12th hearing since we were appointed by Chairman Skelton and then ranking member John McHugh in March of last year.
"In these hearings, the Panel has found that while the nature of defense acquisition has substantially changed since the end of the Cold War, the defense acquisition system has not kept pace. The system remains structured primarily for the acquisition of weapon systems at a time when services represent a much larger share of the Department's acquisitions, and the system is particularly poorly designed for the acquisition of information technology even though we are now in the information age.
"Even in the acquisition of weapon systems, the Department's historical strength, the system continues to generate development timeframes for major systems measured in decades, an approach which has resulted in unacceptable cost growth, negative effects on industry, and in too many cases, a failure to meet warfighter needs.
"The Panel has found that there is little commonality across the defense acquisition system. The acquisition of weapon systems, the acquisition of commercial goods and commodities, the acquisition of services and the acquisition of information technology have very diverse features and challenges.
"In a few areas, however, the Panel has found common issues. Across all categories of acquisition significant improvements can be made in: managing the acquisition system; improving the requirements process; developing and incentivizing the highest quality acquisition workforce; reforming financial management; and getting the best from the industrial base.
"The Panel began with the question of how well the defense acquisition system is doing in delivering value to the warfighter and the taxpayer. For most categories of acquisition, only anecdotal information exists about instances where the system either performed well, or poorly. Even where real performance metrics currently exist, they do not fully address the question. The Panel continues to believe that real metrics are needed. The Panel has also heard that challenges with the requirements process are a major factor in poor acquisition outcomes. The requirements process for the acquisition of services is almost entirely ad hoc. The process for developing requirements for the acquisition of weapon systems is overly cumbersome, lacking in expertise and capacity, and subject to requirements creep.
"There is no doubt that the Department needs an acquisition workforce that is as capable as its advanced weapon systems. To achieve this, the Department requires flexibility to efficiently hire qualified new employees, and to manage its workforce in a manner that promotes superior performance.
"The Department must develop new regulations for the civilian workforce which include fair, credible, and transparent methods for hiring and assigning personnel, and for appraising and rewarding employee performance.
"Also underlying the success of the defense acquisition system is the Department's financial management system. The Panel is concerned that the inability to provide accurate and timely financial information prevents DOD from adequately managing its acquisition programs and from implementing true acquisition reform.
"Finally, the Panel has heard that the Department can enhance competition and gain access to more innovative technology by taking measures to utilize more of the industrial base, especially small and mid-tier businesses. And in managing that industrial base, that the Department is best served when it deals with responsible contractors with strong business systems.
"We look forward to hearing from today's witnesses about these topics to get their expert views on how these problems can be solved. I know turn to my friend, Congressman Mike Conaway of Texas, for his opening remarks."